Land Loan Calculator for Commercial Investors

How to Use This Calculator

The land loan calculator helps you estimate monthly payments and financing costs before you commit to buying a parcel. Whether you are evaluating raw land, unimproved land, or improved land, the inputs below allow you to model the loan structure and understand your true cost of ownership.

Enter the following details to estimate your land loan payments:

• Purchase Price: Total cost of the land. Raw land usually has lower prices but higher financing risk, while improved land may qualify for better terms.
• Down Payment: Typically 20-50%. A larger down payment lowers monthly costs and overall risk.
• Interest Rate: Enter the lender's quoted rate. Even small changes (8.0% vs. 8.5%) can shift total costs significantly.
• Loan Application Fee: Upfront fee (flat or %). Include it for a more accuracy.
• Loan Term: Usually 5-20 years. Shorter terms mean higher payments but less interest; longer terms improve flexibility but add exposure to rate risk.

After entering your details, the calculator shows your estimated monthly payment and full breakdown of principal, interest, and fees. Use these results to compare lenders or run deeper analysis with our IRR calculator.

Understanding Your Results

Once you enter your details, the calculator breaks down your loan into monthly payments, total interest, and overall cost. Here's how to interpret the numbers:

• Monthly Payment: The amount you owe each month. It combines principal (the loan balance) and interest (the lender's charge). A higher down payment directly lowers this number.
• Total Interest Paid: The cumulative cost of borrowing. Because land loans often run 5-20 years, shorter than typical CRE mortgages. Interest costs can be high relative to the loan size.
• Loan to Value (LTV): Shows how much of the purchase is financed compared to the land's value. Lenders usually prefer an LTV of 50-80% for land.

Use these results to evaluate risk and ROI. For example, a first time investor may prioritize affordable monthly payments, while a retiree may prefer to pay more upfront for security. Experienced investors often model balloon scenarios alongside IRR calculations to plan exit strategies.

Frequently Asked Questions

What credit score do I need for a land loan?

Most lenders require a minimum credit score of 650-700 for land loans. Stronger credit can help you qualify for better rates, which lowers your monthly payment in the calculator.

Are land loans harder to get than home loans?

Yes. Land loans are considered higher risk, so lenders usually require larger down payments (20-50%) and shorter terms. The calculator helps you see how these stricter conditions affect financing.

What is the typical interest rate on land loans?

Land loan interest rates are usually higher than commercial mortgages, often in the 4-12% range. Improved land with utilities may qualify for lower rates. Enter different rates into the calculator to see the long-term cost impact.